What makes a business venture-backable?
In this episode of High Stakes, K Street Capital’s Paige Soya and Nick Duafala sit down with Jonathan Sherry, founder and CEO of Alium and former co-founder of CB Insights, for a Venture Capital 101 discussion about the business models VCs evaluate and what makes them scalable, defensible, and fundable.
The conversation covers the fundamentals of SaaS and marketplaces, what constitutes a true platform, and why founders should understand the distinction between a business model and a pricing model. Jonathan also shares how CB Insights and Alium have used subscription models, seat- and capability-based pricing, and marketplace dynamics to monetize their businesses.
The group then explores one of the biggest shifts in technology: AI and the rise of usage-based and labor-replacement models. They discuss whether AI will fundamentally change SaaS, why customers increasingly want to experiment before committing to annual contracts, and what founders should understand about consumption, utilization, pricing, and ROI.
The episode also examines what VCs look for beyond ARR, including customer concentration, ACVs, renewals, paid POCs, and evidence that a company has built a repeatable business model.
Finally, the conversation turns to liquidity in venture capital. With companies remaining private longer and fewer pursuing IPOs, the group discusses M&A, secondary markets, alternative paths to liquidity, and why exits in the $100 million to $250 million range can be compelling outcomes for early-stage investors.
In this episode:
- What makes a business model VC-backable
- Why SaaS remains a compelling venture business model
- How marketplaces and platforms create defensibility
- Why a “platform” is not necessarily a business model
- How startups can evolve their business models as they grow
- The emerging “service as software” and labor-replacement model
- How AI is accelerating the shift toward usage-based pricing
- The risks and opportunities of consumption-based models
- Why customers increasingly want to experiment before committing
- What paid POCs reveal about the quality of a startup’s revenue
- Why VCs evaluate customer concentration and diversification
- What a strong seed-stage SaaS customer portfolio can look like
- Why founders shouldn’t confuse potential revenue with actual ARR
- How VCs approach liquidity when companies remain private longer
- The growing role of secondary markets
- Why $100 million to $250 million exits can be attractive outcomes
- Jonathan’s biggest lesson from CB Insights: never give up a market lead
- Why founders must keep moving forward
Topics: Venture Capital • VC-Backable Business Models • SaaS • AI Startups • Usage-Based Pricing • Marketplaces • Startup Fundraising • Revenue Quality • ARR • Go-to-Market • Venture Investing • Liquidity • Secondary Markets • Founder Advice
